If We Processed Foreclosures More Rapidly, Prices Would Be Even Lower

A report from Attom Data. “ATTOM’s year-end foreclosure report provides a unique count of properties with a foreclosure filing during the year based on publicly recorded and published foreclosure filings. ‘Plummeting foreclosure completions combined with consistently falling foreclosure timelines in 2018 provide evidence that most of the distress from the last housing crisis has now been cleaned up,’ said Todd Teta, Chief Product Officer. ‘But there was also some evidence of distress gradually returning to the housing market in 2018, with foreclosure starts increasing from the previous year in more than one-third of all state and local housing markets.'”

“‘Some of that distress was driven by natural disasters, most notably in Houston, where foreclosure starts increased 61 percent,’ Teta continued. ‘But natural disasters do not explain the increase in markets such as Detroit, Minneapolis-St. Paul, Milwaukee and Austin — all of which posted double-digit percentage increases in foreclosure starts in 2018.'”

“States with the longest average time to foreclose in Q4 2018 were Hawaii (1,429 days); Florida (1,311 days); Indiana (1,214 days); Arizona (1,183 days) and New Jersey (1,162 days). Among 499 counties nationwide with sufficient data, those with the longest average time to foreclose in Q4 2018 were Marion County (Indianapolis), Indiana (2,521 days); York County, Pennsylvania (2,432 days); Honolulu County, Hawaii (2,152 days); Dauphin County, Pennsylvania (2,054 days); Queens County, New York (2,046 days) and Denton County, Texas (1,961 days).”

From The Real Deal. “Foreclosure filings picked up 13 percent last year in Florida. The state registered one of the highest foreclosure rates in the nation in 2018, with about 0.71 percent of homeowners defaulting on their loans.”

“The foreclosure numbers are mostly consistent with ATTOM’s mid-2018 report, which found numbers dropping in the New York and Chicago metro areas, but ramping up in Los Angeles and South Florida. That indicates lenders could be loosening their criteria in those markets. Foreclosure activity rose sharply in New York City in 2017, reaching its highest level there since 2009.”

The Dallas Morning News in Texas. “In North Texas, home foreclosure filings inched up after seven straight years of declines, according to Attom Data Solutions. In 2018, foreclosure actions were started on 7,295 D-FW area homes — up 4 percent from 2017 levels. Texas foreclosure filings were up 15 percent in 2018, primarily due to lingering effects of the 2017 Gulf Coast hurricanes.”

“Austin-area foreclosure starts rose 31 percent last year from 2017 levels, according to Attom Data Solutions. Houston foreclosure postings were up 61 percent in 2018.”

“Not all foreclosure filings result in a forced sale of the property. Lenders often schedule a home foreclosure for several months while they negotiate with the borrower. Only 4,271 D-FW area homes actually sold at foreclosure in 2018, Attom says. That’s an 8 percent decline from 2017 and the lowest volume of forced sales in four years. But last year’s increase in foreclosure postings could be indicative of higher forced sales ahead.”

From WTOP on Maryland. “Maryland remains among states with the highest foreclosure rate — and Baltimore City still ranks among cities with the highest foreclosure rates. In 2018, the foreclosure rate in Maryland was 0.86 percent, double the national average and the third highest among states, behind New Jersey and Delaware.”

“Baltimore ranks ninth among cities for foreclosure rates last year, at 0.89 percent. The cities with the highest foreclosure rates last year were Atlantic City, New Jersey, at 2.37 percent; Trenton, New Jersey, at 1.56 percent; and Flint, Michigan, at 1.16 percent.”

From Tampa Bay Newspapers in Florida. “When it comes to the roughly 100 derelict homes scattered around the city, Community Standards Manager Tracey Schofield told commissioners Jan. 15 that code enforcement just wasn’t cutting it. Therefore, in a bid to crack down on the nearly 500 properties racking up well over $10 million in fines, city leaders decided it was time to open the door to foreclosures and move forward with an agreement with a lawyer who specializes in the cases.”

“For Commissioner Curtis Holmes, this has been a long time coming. ‘I’ve been in favor of going after these properties a long time ago, so when I first read this thing, this was a ‘thank you Jesus’ moment,’ he said.”

The News Press in Florida. “East Naples resident Deborah Giardello faces a foreclosure lawsuit because of a dispute with Bruno Total Home Performance. The local Realtor said she didn’t pay the Bonita Springs-based company because it misled her about the cost of getting a new air conditioner with a maintenance agreement — and about how she would pay for it.”

“Several other homeowners in Southwest Florida have made similar complaints to the Attorney General’s Office, which confirmed Tuesday it’s investigating the business. The program, authorized by local governments under state legislation, became available in Florida in 2010 to help homeowners secure loans for projects that make their homes safer and more efficient — from installing shutters to putting in a new air conditioning system.”

“Through the program homeowners wanting upgrades can get a loan through an approved PACE lender and the county will collect on the loan through a special tax on the property for up to 30 years.”

“Katharine Rueb is one of the handful of homeowners who filed a complaint against Bruno Total Home with the Attorney General’s Office. In her complaint, she said the company filed a construction lien against her home for ‘a bogus, made-up amount’ of $20,450, then later filed to foreclose on it.”

“‘Bruno is now threatening my only place to live,’ Rueb said in her complaint. ‘He is trying to take my house.'”

From New Jersey 101.5. “Fewer property owners in New Jersey are at risk of losing their home to foreclosure than in years past, but the state’s foreclosure rate is still the worst in the nation, according to new data. ATTOM Data Solutions finds New Jersey’s rate of foreclosure activity — one in every 75 housing units — was the highest among the 50 states and D.C. in 2018. The national rate was one in every 215 homes.”

“The report counted 47,619 New Jersey properties last year with a foreclosure filing — default notices, scheduled auctions or bank repossessions. At 1,162 days, New Jersey ranks among the states that take the longest time to move a foreclosure from start to finish, the report finds.”

“Jeffrey Otteau, president of Otteau Valuation Group in Matawan, told New Jersey 101.5 the foreclosure process in New Jersey is ‘very protective of consumer rights,’ so judges are ‘very reluctant to approve a foreclosure until all other possible solutions have been exhausted.'”

“‘I can tell you that if we had processed foreclosures more rapidly over the last nine years, home prices would be even lower today because that’s what foreclosures cause in a market,’ he said.”

‘States with the longest average time to foreclose in Q4 2018 were Hawaii (1,429 days); Florida (1,311 days); Indiana (1,214 days); Arizona (1,183 days) and New Jersey (1,162 days). Among 499 counties nationwide with sufficient data, those with the longest average time to foreclose in Q4 2018 were Marion County (Indianapolis), Indiana (2,521 days); York County, Pennsylvania (2,432 days); Honolulu County, Hawaii (2,152 days); Dauphin County, Pennsylvania (2,054 days); Queens County, New York (2,046 days) and Denton County, Texas (1,961 days).’

Ten years ago the time to foreclose in Texas and Arizona was around 45 days.

I’ve been wondering about why a lender would delay foreclosure. I came up with a possible scenario: What if a the 1st lender can generate a substantial amount of penalties and thereby crowd out the 2nd lien so that neither the 2nd lienholder (nor anyone else) would bid more than the 1st lien judgement at the auction? Then the 1st lender gets a tax-loss much bigger than the real loss, and they don’t have to pay the 2nd lien anything even if Fed intervention causes prices to rise again, and they can make a profit PLUS a tax benefit.

You have to separate out recourse vs non recourse states as there is a big difference in processing time. It also depends on if the home is presently occupied by the current home owner or if they have rented the property. Both present occupency rules that must be followed.If not one is living their, the banks can move more quickly but if occupied, it can take quite a bit longer especially if it is rented out.

And in as little as a year there will be toxic mold that can be devastating to people. Homes dont do well in wet, humid environments with no one regularly taking care of them. Banks dont want to budge on price and often homeless or neighborhood miscreants destroy the places while they sit vacant for years – causing any intrinsic value to get cut by 30% or more.

If these banks had to eat reality, housing would drop 30-50% virtually overnight. Too many in power have a vested interest in keeping the fraud going – particularly in prog controlled states where RE is the basis of their weimar economy.

“Homes dont do well in wet, humid environments with no one regularly taking care of them.”

There are a number of foreclosed (abandoned) homes in my corner of the world that have had their pipes broken as they were frozen solid through numerous winters without anyone paying the utilities. I’m sure the walls and attic are full of insects too. It’s difficult to imagine that some entity is paying the annual property taxes on these dilapidated houses.

But after the 2008 real estate crash, his fortunes changed. His house plummeted in value, and later he lost his job. A scientist who lives nearby, says: “They were under severe financial stress.” Another neighbour says: “They were under water”, adding: “That contributed to his desperation.”

The program, authorized by local governments under state legislation, became available in Florida in 2010 to help homeowners secure loans for projects that make their homes safer and more efficient — from installing shutters to putting in a new air conditioning system.”

Another “private-public partnership” racket ostensibly created to “help” FBs or low-income “homeowners,” but in reality set up to funnel taxpayer dollars into patronage and graft rackets benefiting local political machines and corrupt state and municipal politicians and their cronies.

So based on the number of days above: 3.2 to 6.9 years to foreclose on a house. So years then. Really? No hurry to foreclose I guess. Why is that?

Is this a possibility?:
“‘I can tell you that if we had processed foreclosures more rapidly over the last nine years, home prices would be even lower today because that’s what foreclosures cause in a market,’ he said.”

It’s almost as if someone was pulling out all the stops to prop up the housing market. Say it ain’t so!

Free market economics at work. Make that crony capitalism. Extend and pretend, i.e. “can kicking”, only works for so long. The economic cycle can be extended (e.g. recent longest bull market in history), but can’t be prevented. At some point reality bites, chickens come home to roost, etc.

Politicians try to make this happen on someone else’s watch, whom they (strongly) dislike. Take DJT, for example… The system is completely corrupt.

I went through all the Attom files and there’s no detail on Los Angeles for example. Just brief mentions. A few months ago when the defaults first spiked the papers were filled with “three straight months of double digit increases from South Florida to Austin to San Diego!” Now nothing.

I’d like to point out that Attom, Zillow, Redfin and Trulia have join the real estate industrial complex, spitting out report after report meant only to show how awesome it is to buy and sell shacks to each other. Except that pesky price reductions series Redfin produced, which started the current panic. And even that was about a year after the trend showed up.

The falling U.S. stock market futures on frightening China growth numbers are an indication that another great week is on tap for Wall Street. Our federal government is invested in preserving and augmenting the wealth of the 1%.

China’s economy grew 6.4% year-over-year in the fourth quarter of 2018, confirming analyst expectations for the slowest expansion in a decade. What happens this year could reverberate through equity markets far away.
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Just a touch of irony here.
Foreclosure Specialist
“Serve the American Dream Through Affordable Home Ownership.”

Apparently it’s not as affordable as some were led to believe. Not to mention 0% down/100% LTV, 40-50% DTI, subprime FICO, etc.

That being said, it appears that anecdotal evidence would indicate that foreclosures are rising. As long as the relative percent of all loans is small, then not an issue. However, this is not a normal cycle due to bubble-nomics. I’m no housing expert, but real estate is cyclical. We should learn more as the year unfolds.

“According to a recent GoBankingRates survey only 21% of Americans have more than $10,000 in savings with nearly 60% having less than $1,000 in savings”

“How far can families go if one or two income earners loose their jobs? With nearly 60% of Americans having less than $1,000 in savings and the next 15% having less than $5,000 I submit: Not very far.”

“America has added record debt over the past 10 years while financing its recovery with low rates, yet all this spending has done little for the wealth of the general population, rather most are left woefully unprepared for when the recovery ends.”

“Government workers are far from alone in feeling stressed about not getting paid. Nearly 80 percent of American workers (78 percent) say they’re living paycheck to paycheck, according to a 2017 report by employment website CareerBuilder. Women are particularly vulnerable: 81 percent of them report living paycheck to paycheck, compared with 75 percent of men.”

If you’re in Davos this week, then no problem. Not so great for everyone else..